Finding 600908 (2022-001)

Significant Deficiency Repeat Finding
Requirement
Allowable Costs/Cost Principles
Questioned Costs
-
Year
2022
Accepted
2023-01-04

AI Summary

  • Core Issue: There was a significant deficiency in how salaries were allocated to the federal grant, leading to inaccuracies in reported expenses.
  • Impacted Requirements: Compliance with CFR 200.430 was not met, as salary charges were not based on accurate time records.
  • Recommended Follow-Up: Implement regular reconciliations of payroll allocations to actual time worked, with adjustments made to accounting records as needed.

Finding Text

#2022-001 ? Significant Deficiency ? Allowable Costs T.E.A.C.H. Child Care and Development Block Grant, CFDA #93.575 Criteria The Office of Management and Budget issuance of the Code of Federal Regulations (CFR) specifically states uniform administrative requirements, cost principles, and audit requirements for federal awards. CFR 200.430 states, ?Charges to Federal Awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated.? Condition During the course of the audit, it was determined that Management used an allocation methodology to allocate salaries to the federal award based on a historical analysis. Although Management performed a reconciliation of allocation to actual cost, no adjusting entry was performed prior to year-end to adjust the financial records. Cause The cause is human error. Effect The potential effects of not reconciling contemporaneous time and effort reporting to allocated payroll expenses could include an over or understatement of salary expenses allocated to the federal grant. Questioned Costs Approximately $3,337 was overcharged on the $4,645,750 grant award. Perspective Information The finding noted related to three (3) individuals who were overcharged to the grant based on testwork performed for four (4) pay periods. Identification as a repeat finding There was a similar finding in the prior year. Recommendation We recommend a periodic reconciliation and recorded entry to the accounting records relating to payroll allocation to actual time recorded to ensure salary expense allocated to the federal awards is supported by actual time worked. View of Responsible Official The Association will conduct reconciliation of payroll allocation twice each year at the end of the second quarter and at the end of the third quarter to actual time recorded to ensure salary expense allocated to the federal awards is supported by actual time worked. A budget revision based on actuals will be implemented effective the fourth quarter.

Categories

Allowable Costs / Cost Principles

Other Findings in this Audit

  • 24466 2022-001
    Significant Deficiency Repeat

Programs in Audit

ALN Program Name Expenditures
93.575 Child Care and Development Block Grant $4.44M